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RETRENCHMENT DISPUTES: TERMINATION NOTICES MAY BE INVALID

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Retrenching employees is no simple matter. The requirements are more stringent than where employees are dismissed for other reasons. A recent Labour Court case has indicated that in the case of large-scale retrenchments, there is even a greater burden on employers than previously thought.

There are two types of retrenchment, commonly referred to as small-scale and large-scale retrenchments. Different procedures apply and different consequences follow, depending on whether the retrenchment falls into the one or the other category. For example, the CCMA may be called upon to facilitate a large-scale retrenchment and employees may strike in opposition to the decision to retrench. These options are not available for small-scale retrenchments.

The procedures that govern large-scale processes are not very clearly worded. They provide for two situations: the first is where the CCMA is called upon by a consulting party (usually the employees or their trade union) to facilitate the consultation process; the second is where no intervention by the CCMA has been requested.

We know that where an employer embarks on a large-scale process and the CCMA has become involved in facilitating the process, a period of 60 days must have expired from the date the notice of the proposed retrenchment has been issued before a strike can take place, or employees be dismissed. In this case it is not necessary for either the employer or the employees (or their trade union) to make a further referral to the CCMA for conciliation if the employer wants to issue notices of dismissal, or the employees want to strike: the CCMA has already been involved and a further referral would be superfluous.

But what is the situation if the CCMA has not been called upon by either the employer or employees to facilitate a large-scale retrenchment? Do the employees (or their union on their behalf) have to refer a dispute to the CCMA for conciliation before they can strike? In Leoni Wiring Systems v NUMSA the court answered this question in the affirmative. Because the CCMA was not involved in the dispute, a referral to conciliation is required. Failure to refer a dispute will render any subsequent strike over the retrenchments unprotected. This aspect of the decision seems uncontroversial.

However, the court went further by saying that if the employees or union do not refer the dispute for conciliation the employer cannot simply give notice of termination of employment. If there was a dispute in existence about any aspect of the retrenchment at the conclusion of the consultation process, it is essential that the dispute first be referred for conciliation. A certificate of non-resolution must then be issued or a period of 30 days must have expired from the date of referral to the CCMA (whichever occurs first), before the employer may give notice of termination of employment. This means that if the employees or union have not referred the dispute for conciliation, the employer itself must do so.

The case therefore makes it imperative in these circumstances for employers to determine whether their employees are unhappy about any of the substantive aspects of the retrenchment before they issue notices of dismissal. This can be done, e.g., by asking the affected employees to indicate by a certain date whether there are any issues that they regard as being in dispute. If there is no dispute, the employer may issue notices of dismissal after completion of the process without the need for a referral to the CCMA and without having to wait for any time periods to expire. If, however, an aspect remains in dispute, the employer should first refer a dispute to the CCMA. Failure to do so will render the notices of termination invalid.

Barney Jordaan of Maserumule Employment Consultancy (Pty) Ltd for www.labourwise.co.za

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